Social Media challenges the traditional power relations between consumers and brands

Continuation of blog post part 1 published on 2nd of June.

The previous post has established consumer power. This next question addresses if brand power has vanished entirely and will be illustrated by the case of Coca-Cola.

Case 2: How Coca-Cola exercises its brand power over consumers

During the Super Bowl XLVIII in 2014, which was watched by more than 50 million people worldwide, Coca-Cola as its main sponsor showed a one-minute long commercial. It was titled “America is Beautiful”, sung in seven different languages promoting diversity (Orr, 2014; Staff 2014). The excerpt of the video that got the most attention shows a homosexual couple roller-skating with their daughter (Orr, 2014). While the LGBT (lesbian, gay, bisexual, and transgender) community and homosexual rights organisation Glaad celebrated the commercial and most consumers appreciated the content of the advertising, Coca-Cola still earned criticism for not using exclusively English as language in their commercial (Orr, 2014; Horovitz, 2014). The commercial was spread in social media within hours resulting in 8.4 million YouTube views and the attraction of more buzz than of all other commercials in total (Horovitz, 2014). With the advertising, Coca-Cola set a milestone in the advertising industry since it was the first commercial about homosexuals ever during the SuperBowl (Orr, 2014).

Less than one week later, the Olympic Games in Sochi started. Coca-Cola as their longest sponsor showed the discussed commercial during the opening ceremony (Horovitz, 2014; Staff, 2014). However, the Coca-Cola commercial for the Olympics in Sochi differed from the Super Bowl version. 30 seconds of content were added, containing facts about America showing the pluralism that has been merged to one America (Staff, 2014). The homosexual couple remained in the video and underlined the controversial context of the Sochi Olympics in Russia, which has anti-homosexual propaganda laws (Orr, 2014).While Coca-Cola received positive buzz for its commercial in Sochi by a global audience, some Americans still continued criticising in social media about the language issue.

Analysis of case 2: How Coca-Cola exercises its brand power over consumers

This example shows that brand power still exists in the age of Web 2.0 since brands still have immense influence on consumers.

When criticism emerged in social media about the usage of different languages in their commercial, Coca-Cola did not respond, unlike Barilla, but exposed brand power and remained convinced about its original brand meaning and heritage which promotes the pluralism of America (Staff, 2014). Their brand power was especially demonstrated by showing the same commercial in front of the global Olympics audience again with an introduction underlining the arguments for their position. This shows that some aspects of the traditional paradigm of marketing, precisely that the marketer controls the brand image and demonstrates brand power, has not entirely become obsolete yet (Chrisodoulides, 2009; Muniz & Schau, 2011). In the Coca-Cola case, consumers could not shape the brand image by using social media “weapons” to attack the brand.

Moreover, Coca-Cola presented its brand power by taking on a role as a global advocate for human rights, especially for minorities such as homosexuals. The marketers did not fear the organizers of the Olympics or the Russian government supporting anti-homosexual laws but stood up for global equality. As a result, Coca-Cola achieved that consumers perceive the brand as citizen artist which engages in human rights.

However, even though Coca-Cola successfully reached the global audience with the promotion of accepting homosexuality and evoked a positive buzz, some Americans did not agree on the different languages used, although Coca-Cola underlined the arguments for their behaviour in the second video. They should have realized the importance of those consumers and should have engaged with their American customers in social media explaining the reasons on a more personal level to maintain a good customer relationship.

How managers can cope with the new power relations between consumers and brands

It was shown in the Barilla case that brand power can increase due to social media but the level of power given to consumers depends on the brands and their adaptation to the new environment (Cova & Pace, 2006). While Barilla succumbed to consumer power, Coca-Cola achieved to maintain brand power. A first step for companies is to understand the new reality, precisely that there is a power shift from brand power to consumer power, and that this can be exercised over a brand by so-called “network effects” (Kucuk & Krishnamurthy, 2007). Those insights can create a proactive attitude and therefore prepare the brand for surprises of consumer power like the Chairman of Barilla experienced (Kucuk & Krishnamurthy, 2007).

Secondly, brands need to understand that even though the current era of postmodernism is characterized by critical consumers such as the ones in the Barilla case, it should be stated that consumer power does not necessarily lead to a damage of a brand’s reputation (Fournier & Avery, 2011). In the Coca-Cola case, it was shown that consumers can also enhance a brand’s reputation by positive buzz (Barwise & Meehan, 2010). As a result, marketers should not see the current marketing environment as a battlefield but more as a marketplace in which brand power (supply) and consumer power (demand) are co-existing. An adequate satisfaction of consumers’ needs can lead to consumers acting as positive referees.

It should be even taken one step further by collaborating with the consumers. Instead of becoming a victim of serendipitous hijack, brands should try to achieve a “co-created hijack” (Cova & Pace, 2006), meaning that marketers consciously invite subcultures to co-create a brand. A forum like Nutella created for exchanging ideas can help consumers to satisfy their feeling of being heard (Cova & Pace, 2006; Fournier & Avery, 2011). This can lead to an increase in brand power since a brand has more control over a forum that is chaired by themselves.

Consumers can even be asked to create improvements and innovative ideas (Antorini, Muniz & Askildsen, 2012; Wind, 2008). Such a value co-creation is a win-win-situation because consumers acquire what they want and marketers do not only obtain immediate consumer insights about what their consumer’s value but the consumers even pay for the realization of their ideas (Antorini, Muniz & Askildsen, 2012; Barwise & Meehan, 2010; Fournier & Avery, 2011). For example, at Frito-Lay, the Lays brand regularly invites its consumers to suggest flavours (Fournier & Avery, 2011). Adapting their online tactics towards those insights helped the company to be more profitable. As a result, co-creation leads to synergies and mutual benefits.

However, there are three aspects to be considered in that approach. First of all, a brand should reflect ethical issues since the consumers are exploited twice: On one hand, by using their ideas for free and on the other hand, when the consumers buy their own ideas from the company. Secondly, it would be wrong to listen only to consumers since they only know what they have experienced and do not have experience in R&D (Ulwick, 2002). Moreover, high engagement is required when collaborate with consumers, which will also affect the resources of the brand (Fournier & Avery, 2011). There is a necessity for a quick response to consumers in social media and such constant commitment can be cost-and time-intensive and also nerve-wracking (Kucuk & Krishnamurthy, 2007).

In order to maintain brand power and to prevent negative buzz, companies should show a proactive attitude based on corporate social responsibility since consumers of postmodernism value ethical behaviour (Kucuk & Krishnamurthy, 2007; Firat & Venkatesh, 1995). This can help the brand to defend from possible attacks. It can also increase their raison d’ être since the reason for being is to satisfy consumers’ needs and not making profit only.

Finally, brands should not see the consumer as their enemy and the marketing environment as a battlefield. The consumer is still the consumer whose needs are to be satisfied in order to make profit. A collaboration of consumers and brands can give both counterparts more power.

Conclusion

The traditional marketing paradigm that dealt with an active, powerful marketer and less powerful, passive consumers has become less relevant in the context of web 2.0 since the latter one has empowered consumers to build networks and attack brands via social media tools. However, aspects of it e.g. that brand power persists are still relevant. Therefore, the power distribution should not be seen as dichotomous only allowing one counterpart to have the absolute power. The reality deals more with a co-existence of both, brand power and consumer power, whereby the level of power is contextual.

To maintain brand power, brands need to adapt to the new environment by taking on a collaborative instead if ignoring or defensive approach on consumers. Collaboration enables brands to gain insights from consumers for free and adapt those for a profitable marketing strategy. Moreover, companies are wise to engage in a proactive approach in form of CSR as this can help companies to remain transparent and protect the brand from potential consumer attacks.

Further research should be taken on which collaboration strategies are the most efficient and which social media platforms are the most effective for collaboration between brands and consumers.

Staff, J. (2014), “America is Beautiful and Coca-Cola is For Everyone”, Available Online: http://www.coca-colacompany.com/stories/america-is-beautiful-and-coca-cola-is-for-everyone [Accessed 7 February 2014].